Objective: Bronchiolitis is a common lower respiratory tract infection in the first year of life. In this disease upper respiratory tract infection is associated with nasal congestion, respiratory distress and hypoxia. We studied the effect of phenylephrine drops as a decongestant in treatment of light and moderately severe cases of acute bronchiolitis. Methods This is a double blind randomized trial involving 100 children aged 4 weeks to 12 months. The patients were divided into two groups, the first group received 0.1 ml phenylephrine 0.5% and the second group 0.1 ml sodium chloride (NaCl) 0.9% as placebo in both nostrils. Respiratory rate, heart rate, O2 saturation, dyspnea, retractions and wheezing were assessed before and 30 minutes after medication. Findings: After medication, O2 saturation and respiratory muscles retractions in the phenylephrine group were significantly better than those of the placebo group (P=0.004 and P=0.002, respectively). In the phenylephrine group, O2 saturation, retractions and wheezing were also significantly better before than those after medication (P=0.003 and P<0.0001 respectively). In the placebo group no significant difference before and after intervention was observed. Conclusion: Phenylephrine as a topical decongestant is an inexpensive, easily available and suitable means in the treatment of mild to moderately severe bronchiolitis.